Top Entrepreneur Video Account IP Wu Xiangdong Calls Out E-commerce Platforms: Leave a Path for Millions of Offline Liquor Merchants

On the afternoon of March 18, Zhenjiu Lidu Chairman Wu Xiangdong held an online press conference on his personal video channel. He admitted, “This is a very important live broadcast for me.”

Currently, the Baijiu industry is facing deep adjustments, with most liquor companies under operational pressure. During this three-hour event, Wu Xiangdong twice called out to e-commerce platforms, saying that “billion-dollar subsidies” are causing the industry to fall into a vicious cycle, making it difficult for offline tobacco and liquor shop owners to make a living.

He also set rules within his self-established “Ten Thousand Merchants Alliance” liquor sales model: no low-price sales and no online sales.

“Giving Offline Liquor Merchants a Way Out”

As an entrepreneur with over 30 years of experience in the Baijiu industry, Wu Xiangdong openly shared that he has gone through multiple industry cycles. In the past, two-thirds of his time selling liquor was unprofitable, but he endured.

“Enduring” is the primary challenge for current Baijiu practitioners.

Wu Xiangdong pointed out that frequent “billion-dollar subsidies” on online platforms disrupt the pricing system of famous wines. Offline tobacco and liquor shops are generally losing money, with a situation where “big bosses lose big, small bosses lose small, and as long as they sell liquor, they lose money.” He explained that the purchase prices at offline shops are even higher than online platform prices, with inventory piling up and unsellable stock. “The hardest days are for offline shops that support their families—selling anything is hard to profit from. Liquor in stock doesn’t move, and popular brands drop in price after a few days.”

In response, Wu Xiangdong twice called out to e-commerce platforms during the live broadcast, urging them to “give more than 10 million offline liquor merchants a way out.”

He believes that controlling prices is crucial in current liquor sales and proposed the “Six No-Allows” strict rules for the “Ten Thousand Merchants Alliance,” including no low-price sales and no online platform sales, which are placed in the top two.

This is indeed a common dilemma faced by most famous liquor companies and “Baijiu people” today.

On March 18, a certain e-commerce platform’s Feitian Maotai after subsidies was priced at 1,449 yuan, below the suggested retail price of 1,499 yuan, while the distributor’s purchase price that day was 1,570 yuan. Online supply channels are uneven, and many consumers prefer to buy from tobacco and liquor shops, but profit margins for liquor merchants have been greatly reduced. A liquor shop owner stated that now, selling a bottle of Feitian Maotai yields only about 30 yuan in profit.

On one side, there are “liquor bans” and the industry’s deep adjustment cycle; on the other, e-commerce platform subsidies and rapid penetration of instant retail are reshaping the Baijiu distribution system. Data shows a stark contrast: during the recent Spring Festival holiday, orders on an instant retail platform increased by over 60% year-on-year, while research by securities firms indicated that traditional offline channel orders shrank by about 10%.

Problems such as difficulty in product sales, slow payments, high inventory, and financial pressure have overwhelmed most offline distributors. Some data predicts that by 2025, the number of tobacco and liquor shops nationwide will decrease by about 19%.

During this year’s National Two Sessions, Yan Tao, Vice Chairman of Zhenjiu Lidu Group, shared his views on instant retail channels.

He believes that instant retail is not a short-term trend; it can effectively reach young people and extend Baijiu from traditional scenarios like business banquets and gift-giving to daily scenes such as home drinking and spontaneous visits from friends. However, caution is needed regarding “price wars.” Cooperation with platforms should seize opportunities but also maintain price red lines.

Betting on Two Key Products

“Without super products, there are no super distributors, super companies, or super profits,” Wu Xiangdong repeatedly emphasized the importance of flagship products during the live broadcast. For Moutai, the super products are Feitian Moutai and vintage wines; for Zhenjiu, they are “Zhen Fifteen” and “Da Zhen.”

Zhen Fifteen was launched in 2016, with cumulative sales exceeding 10 billion yuan. Wu Xiangdong announced the fifth-generation new Zhen Fifteen during the broadcast. Compared to previous versions, the new product increases the proportion of high-quality base wine and incorporates rare old wines from different years.

Zhao Cui Mei, a national-level Baijiu judge and the chief wine designer at Guizhou Zhenjiu, explained on-site that the fifth-generation Zhen Fifteen achieved three major breakthroughs: first, increasing the use of high-quality base wine and aged wine to make the aroma more three-dimensional and full; second, adding rare old wines from different years to enhance richness and layers; third, integrating more flavor-style liquors to create a clear yet harmonious taste profile.

The packaging design of the fifth generation is also noteworthy. Jiao Zhe, Visual Creative Director of Zhenjiu Lidu Group, said that the design team visited intangible cultural heritage artisans and studied classical texts to extract eight auspicious traditional patterns, creating an exclusive “Zhen Treasure Pattern,” which is presented with traditional carving techniques to weaken industrial feel and enhance handcrafted texture.

Wu Xiangdong also dedicated more effort to another strategic flagship product, “Da Zhen.”

Launched in mid-2022, it is positioned in the 600-yuan price range, complementing Zhen Fifteen to form a high-low product matrix. With a rich body, minimalist design, and a solemn promise of authentic vintage, it has sold well across 31 provinces and 280 cities nationwide, becoming the best-selling new product in mid-to-high-end sauce-flavor liquor. Total payments received have exceeded 900 million yuan.

Currently, reducing burdens for distributors is a shared goal among liquor companies. Wu Xiangdong introduced a new liquor sales model centered on “monthly dividends,” linking sales performance with incentives to ensure sellers see income every month and continue earning.

For example, alliance merchants who sell 99 boxes of liquor within three years can receive 24 months of dividend rewards. Those meeting certain standards may even receive equity incentives from the listed company. Distributors no longer need to pay deposits or purchase payments as before; instead, they only need to maintain and supervise their outlets to sell more liquor.

Industry consensus suggests that the Baijiu industry is still in a bottoming-out phase, and short-term recovery is unlikely. Some practitioners openly say, “This year might be even harder than last year.”

As the “First Hong Kong-listed Baijiu Stock” and “Second Chinese Sauce-flavor Baijiu Stock,” Zhenjiu Lidu must also face market pressures from industry adjustments. Wu Xiangdong believes that sauce-flavor liquor is a heavy-asset, long-cycle industry that relies heavily on brand building. Future growth depends on the strength of its own brand.

(Edited by: Jiang Yongdan)

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